Handling Contingencies in Contingent Fee Cases: Sharing Fees With Successive Lawyers

• Publication year: 2024
• Citation: Vol. 37 No. 2 Pg. 30
• Pages: 30

Handling Contingencies in Contingent Fee Cases: Sharing Fees with Successive LawyersVol. 37 No. 2 Pg. 30Utah Bar JournalMarch 2024

Article

by Beth E. Kennedy

Contingent fee agreements start out simple: you'll get a specified portion of any recovery. But they don't always stay that way. Your representation might end before the case is resolved, either because you fired the client or because the client fired you. What happens when the case is later resolved by a different lawyer? How do you get paid for the work you've done?

This situation - where a contingent fee case is handled by successive lawyers - can create a difficult problem. Each lawyer claims their share, and (typically) each lawyer believes the other one is asking for too much. Who did more work? Who took more risk? What hard feelings remain from the termination of the first lawyer? These disputes can bring out the worst in us.

But it doesn't have to be that way. By planning ahead, lawyers who handle contingent fee cases can protect themselves and better ensure that they'll get paid for their work. Although it's a bit more work on the front end, the time spent will pay dividends if it prevents a dispute and gets you what you deserve.

Applicable Rules

It's important to first understand the lay of the land. Our rules governing fee-sharing between lawyers have changed in recent years, and they are still changing. But the most important principles have remained constant.

We started with the American Bar Association's model rule 1.5. Until 2020, our rule allowed lawyers to share a fee if they split it in proportion to the work they performed, or alternatively, if they assumed joint responsibility for the case. Utah R. Pro. Conduct 1.5(e)(1) (2019). The client had to give written consent, and the total fee had to be reasonable. Id. R. 1.5(e)(2)-(3). And a lawyer couldn't share fees with a non-lawyer. Id. R. 5.4(a).

Then came the Sandbox. The Sandbox fundamentally changed how fees could be divided. Now, for the first time, lawyers could share fees with non-lawyers - as long as they did so within a

Sandbox business. Utah R. Pro. Conduct 5.4(c) (2020). And with these changes, the subsection governing sharing fees with lawyers was removed, too. Id. R. 1.5.

As the rules currently stand, nothing purports to govern how lawyers can share a contingent fee. But recently, the Supreme Court's Advisory Committee on the Rules of Professional Conduct has been working to...